Gordon Campbell on National’s Mickey Mouse policies on trade

Supposedly, trade is war by other means, and the rationale for it seems just as empty-headed. Once again, the free trade
= good mantra was taken as a patriotic given in this morning’s RNZ interview with Trade Minister Todd McClay. Apparently, the European Union – our third biggest export zone – says it wants to conclude a Free Trade Agreement with
New Zealand by the end of 2019.

That timetable sounds unbelievably optimistic. It took the EU eight years (2009 -2017) to negotiate an FTA with Canada
that still – on the eve of its provisional enactment – remains incomplete, because of unresolved arguments over key
elements, such as how the trade disputes between the parties will be resolved. Similarly, the just-concluded EU trade
deal with Japan took five years (from 2012–2017) and there too, both parties have been forced to set aside just how
trade disputes will be resolved between them, if and when they arise.

That’s a question for McClay. When he is talking about the TPP (minus the US) deal, he still embraces the current and
highly controversial investor state dispute settlement (ISDS) system. Yet this would be quite unacceptable to the EU
which – for example, in its FTA with Vietnam – adopted its own, very different arbitration system, which closely resembles an open court, not a secret ISDS tribunal. Rulings are subject to appeal and a panel of judges not subject to capture by corporates
sit on the bench. So which system will McClay be pursuing in the EU talks – the old, discredited ISDS system long
criticized by TPP opponents and the EU alike, or the system being promoted by EU Trade Commissioner Cecilia Malmstrom?

And if it is the EU system, why won’t McClay insert that newer, better system into the current TPP ‘minus’ talks, or
into the rewrite of the South Korean FTA that Labour has proposed? If this change was by mutual agreement, no fresh
concessions of a trade/tariff nature would be required. It is a fallacy to assume that any change that we mooted would
necessarily require fresh concessions on our part. The dispute mechanisms stand apart from tariff/access issues.

Currently, Labour’s desire to update the South Korea FTA is being pooh-poohed as evidence of how Labour just doesn’t
understand (or support) how trade talks really work. Candidly, that’s utter bullshit. As indicated, the ISDS mechanisms
could readily be changed by mutual agreement. In fact, given how many years we’ve been told that these deals are top
notch, 21st century quality arrangements, maybe McClay should begin to walk the talk on this issue. Meaning: why are we
clinging to an outmoded, divisive, patently inferior arbitration system that benefits corporations, at the expense of
the sovereign rights of member nations? The EU deal offers us a high quality escape route on ISDS issues. Are we going
to take it?

Moreover, if it is allegedly so impossible to re-negotiate anything at all in the South Korea deal, how does McClay plan
to proceed in the context of the TPP, where Vietnam and Malaysia are treating the absence of the US as being highly
significant to the concessions they previously made? To be consistent with his stance on our South Korea FTA, McClay
will have to refuse to make concessions to either, or both, Malaysia and Vietnam. Is he willing to tell them that in
public? Or is he merely kicking that problem into touch, in the hope the US might come back into the TPP, sometime in
the future?

Ultimately, the “free trade = good” mantra simply doesn’t wash, not when national sovereignty is on the auction block.
The research evidence is that the projected gains in jobs over the next 15 years from the TPP deal would be miniscule –
even for US workers, let alone New Zealand ones - compared to the rights that are being given away. Despite the bluster
by free trade advocates, a change of a couple of points in the exchange rate would achieve just as much for us as the
TPP would deliver.

As the explosive growth in Australia’s trade with China in the 2000s also showed, the counter factual is that countries
will successfully export to each other with or without these kind of deals. (The Australia/China FTA didn’t come into
force until December 2015, long after the export boom began.) By and large, the giveaways to corporations that these
deals contain are not about trade at all – tariffs are no longer their central element - but about securing market
dominance. Corporate self interest is not a good reason for New Zealand to trade away our rights to legislate in our own
best interests. Labour, at least, recognizes there is a problem here.

What does Winston Peters Want ?

Get it straight. As this morning’s RNZ interview showed, Winston Peters may call for transparency from everyone else, but his own accountability must be treated as beyond
question. Ummm… how much revenue would be lost under his plan to cut the corporate tax rate from 28 to 25 per cent? Who
knows? Not Peters evidently, but he’s sure it would be revenue neutral or revenue positive, because of all the growth
that would ensue. Yep, he’s peddling the same old snake oil medicine – that if you cut taxes on business, entrepreneurs
will be free, free to cast off the shackles and generate growth.

Hate to rain on his parade, but cutting taxes doesn’t necessarily/commonly/hardly ever result in growth. Ronald Reagan
saw deficits explode when he tried it. More recently in Kansas, cutting corporate taxes lead to a collapse in social services, not a libertarian nirvana. Conversely, when (a) Bill Clinton and (b) Barack Obama raised taxes, growth followed.
Conclusion : there’s little or no causal connection between the two.

Still, the RNZ interview is grimly amusing, if only to make you wonder how the country survived having this guy as
Finance Minister. One question from a heroic Guyon Espiner led to this hilarious existentially fraught response from
Peters: “Define what you mean by what do I want?” Hmmm.

Roughly translated, Moyamoya is Japanese for ‘puff of smoke ‘ and the term describes how brain scans depict the gradual
constriction of the blood vessels in the brain that the disease brings in its wake…Two brain surgeries later ( the most
recent in early 2016) and she’s back on deck though, and making music again. Here’s a cut from 2016 she created with
Anderson Paak, who’s also set to appear at Laneway next year…

Next in Comment

Last year I wrote about the great potential of Open Government here , and about
the last Government’s performance on the OGP to date here . These provide background
on why Open Government is important and how New Zealand has been doing so far.

The FBI takes seriously its obligations to the FISA Court and its compliance with
procedures overseen by career professionals in the Department of Justice and the
FBI. We are committed to working with the appropriate oversight entities to ensure ...

It’s a cruel saga, and one that promises no immediate end. Turkey, considered one
of the more potent of powers within the NATO alliance, has manoeuvred itself into
a play that Washington will find hard to avoid. For Ankara, one thing must not happen ...